Justice Department and SEC probe Goldman role in SVB

Justice Department and SEC probe Goldman role in SVB
Regulators are looking at Goldman Sachs' role in Silicon Valley Bank's efforts to raise funds shortly before it collapsed in March.
JUN 16, 2023

Justice Department prosecutors are among the U.S. officials who have queried Goldman Sachs Group Inc. over its role in Silicon Valley Bank’s attempt to raise funds as the California-based lender careened into failure, according to a person familiar with the matter.

The scrutiny by the agency’s fraud section and the U.S. Attorney’s Office for the Northern District of California is part of a broader review of the final days of SVB, said the person, who asked not to be named discussing the confidential investigation. The Securities and Exchange Commission is also reviewing the matter, the person said. 

SVB offloaded a $24 billion portfolio to Goldman at a loss and sought the firm’s help in raising more than $2.2 billion to cover the shortfall, according to disclosures in March. Goldman couldn’t pull off the deal, and a bank run in the wake of that offering effectively doomed SVB. The bank disclosed last month that it was cooperating and providing information to the government in connection with investigations and inquiries into SVB.

“SVB engaged Goldman Sachs to assist with a proposed capital raise and sold the firm a portfolio of securities,” Goldman said in a statement on Thursday, reiterating that it was cooperating with the government’s queries. “Prior to that sale, Goldman Sachs informed SVB in writing that we would not act as their adviser on the sale, and that SVB should not rely on any advice from the bank in this regard, but instead hire a third-party financial adviser.”

The Wall Street Journal reported Thursday that Goldman had been subpoenaed by the Justice Department, which declined to comment. The SEC also declined to comment. The queries don’t mean Goldman Sachs has been accused of wrongdoing, and investigations are sometimes closed without any further action.

When SVB collapsed on March 10, it was one of the biggest bank failures in U.S. history, with more than $175 billion in deposits and $209 billion in total assets. 

How to find the right funds for your clients without wasting time

Latest News

AI marketing adoption gap costs financial firms revenue
AI marketing adoption gap costs financial firms revenue

Cornerstone Advisors study reveals compliance bottlenecks stall campaigns weeks after customer opportunities close.

HB Wealth enters Texas with physician-focused advisory team
HB Wealth enters Texas with physician-focused advisory team

A father-daughter trio managing approximately $700 million joins the Atlanta-based fee-only RIA, establishing its Austin foothold.

SEC alts proposals may spark compliance 'culture shock' for managers
SEC alts proposals may spark compliance 'culture shock' for managers

CFP, CFA and CPA holders could gain accredited investor status as regulators weigh wider private market access for advisory clients

Advisor tech platfoms court firms with discounts, notaries, education
Advisor tech platfoms court firms with discounts, notaries, education

DeepVest, Vanilla and Libretto roll out tools to help financial advisors launch firms, close estate plans and sharpen planning skills

When it comes to retirement, Americans struggling with 'permission to spend,' says Prudential
When it comes to retirement, Americans struggling with 'permission to spend,' says Prudential

“People aren't effectively using their wealth in retirement,” said David Blanchett of Prudential.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains